Roadmap for Logistics Excellence: Need to Break the Unholy Equilibrium

G Raghuram1 and Janat Shah2

This white paper attempts to provide a roadmap for India to move towards logistics
excellence. Apart from raising issues that are currently relevant, it also draws from
the issues that were raised in the previous three logistics summits and continue to be
relevant today. As a departure from the earlier summits, it was felt that some of the
issues could be presented even prior to the summit, to enable discussions and
prioritization during the summit. The paper begins with an assessment of the overall
performance of logistics in India, followed by a framework of an “unholy
equilibrium” that seeks to explain where we are and why, and then provides actor
wise action agenda as the roadmap towards logistics excellence.

1. Logistics Performance

The logistics performance of any economy needs to be assessed in totality, by

examining the quality of service provided and the costs incurred. Even though Indian
economy has done quite well in the post liberalization phase, the role of logistics in
this has not been significant. A major contributor to the economy has been service
sector, which has not really made demands on the logistics sector. The contributions
through manufacturing sector have happened in spite of the state of the logistics
sector. But what one claim is the heightened awareness of the potential facilitating
role this sector can play.

1.1 Poor Logistics Quality

In spite of the well-intentioned efforts of various actors involved in logistics in the

country, India suffers from poor logistics quality. This affects the growth of the
economy, apart from providing a less than possible quality of life for the citizen.
Some of the parameters and consequences of logistics quality are outlined below:

• Product Availability
− Efficient Consumer Response (ECR) study [Business World, 2002] shows
that product availability is low, with 30% stockouts. Inter regional
comparison might show this to be a bigger problem in rural areas, leading to
regional disparities.
− The consequences are quite significant, especially in the context of medicines
and food.
− There is an overall reduction in choices, leading to lower quality of life.

• Product and Service Quality

− There is reduction in choices, poor functionality and repair mindset, leading
to lower quality of life.

1
Indian Institute of Management, Ahmedabad, graghu@iimahd.ernet.in
2
Indian Institute of Management, Bangalore, janat@iimb.ernet.in
The authors acknowledge the travel support provided by CII, which facilitated the writing of
this paper. This paper was presented at the CII Logistics Convention, Chennai, October 2003,
and AIMS International Conference on Management, Bangalore, December 2003.
• Responsiveness
− We have export disadvantages [Ananth, 1995] and higher inventories. The
average inventory level of grocery stores is 45 days of sales in India,
compared to a range of 11 to 22 days in developed countries [Business
World, 2002]. This is caused by higher lead times [Sahay, Iyer, and Gupta,
2002] due to lower speed of transport, number of check points, turnaround
time at ports [Government of India, 2003], etc. A truck in India averages 250
km per day, while in the developed countries the average is closer to 600 km
per day [Rakesh Mohan, 1996]. The average turnaround time at Indian major
ports was 5.9 days in 1998-99, compared to an international average of 2
days [Raghuram, 2001]. During 2001-02, the average turnaround in the major
ports was 4.5 days [Indian Ports Association, 2002].
− There is loss of life, injuries and loss of property in disaster management
situations (Gujarat earthquake, cyclones, railway and road accidents).

1.2 Significance of Logistics Costs

This is a useful measure to assess the overall logistics performance of an economy. A

proper analysis of this, component wise and over time, and benchmarked with other
countries can enable policy directions. However, in the Indian context, the research
base is insufficient to claim reliable assessments for a meaningful discussion.

At a broad level, the nature of costs can be classified as

• Direct (transportation and handling)

• Indirect (inventory, losses within a system, etc)
• Hidden (costs borne by other systems like infrastructure wear and tear, safety,
pollution, distortions due to side payments, losses outside a system, etc)
• Opportunity (foregone sales transactions)

As outlined in the previous section, there are significant hidden and opportunity costs,
resulting in value foregone. In this context, an attempt at only examining the
measurable direct and indirect logistics costs (which is easier) has limited value to the
extent of assessing conscious spends on logistics. Exhibit 1 provides such an
assessment, based on CSO statistics. This analysis uses an overall figure of 26% to
arrive at inventory carrying costs as a function of inventory held. This figure is
expected to include measurable losses and support activities like warehousing. As per
this assessment, the logistics cost as a proportion of GDP has been in the range of
11.8% to 13.4% between 1995-96 and 2000-01. There has been a declining trend till
1998-99, followed by a marginal increase. Issues that remain open in this analysis are
to what extent costs related to packaging and trade services should further be
included.

Exhibit 2 gives the results of an attempted analysis by one of the authors in 1987 and
then updated in 1994. (The background to this is given in [Raghuram, 1992]). The
share of the logistics costs as per this was 10% and 12% respectively. Exhibit 3
provides a comparison with US data [CASS Information Systems, 2002], which
gives a share of 11.4% in 1987, 10.1% in 1994, and 9.5% and 8.7% respectively and
2001 and 2002.
There have been a few other attempts, and several numbers of the logistics cost share
have been floating around. In exhibit 4, the authors attempted a simple method of
arriving at the logistics cost share, driven by the total freight earnings of the Indian
Railways, a figure which is reliably available. Given the recent trends and an
understanding of the rail market share, total transportation is taken at five times the
Indian Railways freight earnings. Viewing the total transportation cost as a 45%
component, we derive at the total logistics cost. This yields a logistics cost share of
13% for 2001-02.

We have not found any paper where a rigorous methodology is explicitly discussed.
In the absence of a good and sustainable methodology, with a clear definition on the
cost components, it is difficult to use the logistics cost share for meaningful
discussion.

Comparing the estimated Indian figures and the US figures, India has higher logistics
cost share compared to USA. It can be argued that reduction in logistics costs is
desirable. However, on comparison with countries like China and South Korea
(Exhibit 5), we find that India’s logistics costs are lower, even though such countries
have better infrastructure and practices.

We suggest a framework, which explains this paradox. We introduce two other

variables: “quality of logistics service” (high versus low) and “nature of economy”
(manufacturing intensive versus service intensive). Figure 1 provides the relative
positioning of the four countries. Quality of logistics service (as outlined in section
1.1) essentially prevents direct comparison, since it has implication on the hidden and
opportunity costs resulting in differential quality of life. Hence US and India, and
similarly China and South Korea cannot be directly compared. Between India and
China, and similarly US and South Korea, the nature of economy explains the
difference in the logistics cost share.

2. What is Unholy Equilibrium?

The poor logistics quality in India, as outlined earlier, is a result of equilibrium of the
supply and demand expectation that have evolved over time. These are as a result of
distortions due to policy measures and the inability of industry to deal with them. We
call this an “unholy equilibrium”. Every actor recognizes that they are not in the
desirable state, but is unable to do anything that would significantly change the state.

Descriptions of the states of the unholy equilibrium of some logistical activities are
provided below:

• Disaggregated Semi-organized Road Transportation (Figure 2): Three actors are

primarily involved in this equilibrium: Government, service providers and
shippers.

The core attributes of the equilibrium are price based (rather than service based)
competition, poor logistics service quality, low transportation cost, and no
commercial entry barriers.
 These attributes are a result of the industry structure attributes of this equilibrium,
wherein there is disaggregated (truck) ownership structure and a separation
between ownership (truck owner) and marketing (trucking company).

The industry structure has been caused by various government policies including:
− Large number of check points (inter-state, octroi, etc)
− Motor Transport Workers Act (duty hours, rest requirements, etc)
− Financing incentives for small sized truck owners
− Motor Vehicles Act (driver licensing, over loading, emission norms etc)

Due to the non-existent entry barriers and price-based competition, the truck
owner often resorts to overloading of vehicles, poor truck maintenance, and
making side payments to the frontline regulatory functionaries. These actions of
the truck owners result in induced externalities of the equilibrium, wherein larger
systems bear costs of safety, pollution, and damage to roads. Such externalities
have caused the government policy statements to be strict, but resulting in
incentives for the frontline regulatory functionaries to compromise on policy
implementation and create a vested interest for status quo.

The trucking companies add value by providing marketing services to truck

owners and scale economies to shippers. But given the supply side, they hire on
the lowest rates and have no monitoring of service quality.

The shipper sustains this equilibrium by focusing on direct transportation cost

and reduced service level expectation.

Net cause and effect of this equilibrium is decreasing sensitivity to the direct,
indirect, hidden, and opportunity cost sequence by the concerned actors, while in
reality the costs have increasing significance to the economy. The implications
are outlined in the earlier section.

However, there are exceptions. For example, the time definite express logistics
market, which addresses a niche market requiring time sensitivity. There are also
shippers who have worked with specific service providers to achieve required
service levels including customized product movement and handling (automobile
companies) at a higher direct cost.

• Non-scientific Warehousing: An unholy equilibrium in this is sustained by a

similar cost perspective as described in the previous logistics activity. This is
aided by the availability of low cost labour and the disaggregated intermediary
(distributors, wholesalers etc) industry structure.

• End of Planning Period Syndrome: Attributes of this equilibrium are skewed

level of activities in the intermediate segment of supply chain towards the end of
each planning period. This distorts the material and information flow, leading to
higher inventory and imbalanced asset utilization. This is sustained by the
planning period driven target measurements and longer planning time buckets.

• Unwanted Movement of Goods: This equilibrium is sustained by the tax

structure, especially the central sales tax and differential sales tax. For example
western Tamilnadu, which could be better served by Bangalore on pure logistical
considerations, is often served by other interior points of Tamilnadu, just to
 reduce the tax incidence. Sometimes goods are taken into a low tax zone and then
sold form there just for the tax benefits.

To summarise (and as shown in figure 2), these are largely driven by the nature of the
interface between the actors (in logistics) and the consequent internal practices of the
actors.

3. Breaking of Unholy Equilibrium

Shippers (any firm adding value to a product by conversion) and service providers
(including infrastructural services {transportation, warehousing, third party logistics},
trade services {carrying and forwarding agents, distributors, wholesalers and
stockists, and retailers}, information and communication technology services
{hardware and software}, consultancy {fourth party logistics} and branded
Aggregator), on their own, would be limited in what they can do. Government can
play a significant role by appropriate policy changes. “Industry,” as a larger body, can
also play a proactive role. Industry would include bodies like CII, which cut across
verticals, associations of firms within a vertical like AMA (Automobile
Manufacturers Association), SEA (Seafood Exporters Association), AIMTC (ALL
India Motor Transport Congress) etc.

3.1 Roadmap for Logistics Excellence

We discuss the roadmap for breaking the unholy equilibrium and moving towards
logistics excellence using an idea of a cost quality frontier (figure 3). The current
equilibrium is at specific frontier. Movement could take place along this frontier
through efforts of the shippers and service providers in their own domains. The
implication is that better service levels can be achieved through higher spends in
logistics and conversely lower logistics spends would result in lower service levels.
There is also a limit to the achievable service levels. But the need is to shift the
frontier itself so that we can achieve higher service levels with lower long run
logistics spend. This can be facilitated by industry ensuring better logistics practices
using standards as a means for this, and by government facilitating better
infrastructure and regulation using appropriate policy. We illustrate this by
discussing possible movement between four points in figure 3.

• Point A: Current position. In the absence of major structural changes (changes in

infrastructure and regulation, and logistics practices) it may be possible and
desirable to move to point B.

• Point B: Quality of logistics service would improve and logistics costs would
increase and may be comparable to China or may be even higher. This would be a
consequence of increased sensitivity to the hidden and opportunity costs
discussed earlier.

• Point C: If India is able to improve on either infrastructure front or on practices

front, or a moderate mix of both, we can shift the cost quality frontier downward
and we would be able to move to Point C. This has higher quality of logistics
service and lower logistics costs compared to Point B. However, Point C would
have higher logistics costs compared to Point A.
• Point D: If India is able to make substantial changes in infrastructure and
practices front, we can shift the cost quality frontier further downward and we
would be able to move to Point D where in there would be lower logistics costs
and substantially higher quality of logistics service compared to the current
position A.

Our long run target should be to break the unholy equilibrium at point A and move to
point D. In this context we outline the actorwise action agenda.

3.2 Actorwise Action Agenda

• Government
− Review provisions of Motor Transport Workers Act and Motor Vehicles Act.
− Streamline inter-state and intra-state movements by avoiding regulatory
check points. Replacing the current sales tax structure by a value added tax
would be a great facilitator [Avittathur and Shah, 2001].
− Continue the focus on physical infrastructure development (like the current
National Highways Development Project). An integrated transport policy is
imperative.
− Have more mature frontline regulatory functionaries to ensure better
compliance with the law.
− Review incentives that create the small sized operator, since it creates
distortions in the industry structure.
− Facilitate the build-up of quality human resources infrastructure through
education and research.

• Industry
− Evolve standards and certification systems for practices in transportation,
warehousing, handling and contracts (for each vertical). (The appendix gives
a sample perspective on a few standards adopted in the US and in India for
certain exports).
− Insist on members complying with the law and standards.
− Benchmark for tracking progress on logistics maturity (by using a Capability
Maturity Model) [Singh and Shah, 2001].
− Facilitate the sharing of best practices and benchmarking against performance
indicators (including costs) by supporting research on a sustained basis.
− Invest in the build-up of quality human resources infrastructure through
education and research.
− Organize the “people” sector: small suppliers, distribution intermediaries,
transporters, and retailers.

• Shipper
− Be sensitive to long run cost and value due to better logistics services. If
commercially viable, work with service providers to insist on and improve
logistics quality. Third party logistics service providers could be an
opportunity.
− Insist on compliance with standards and the law.
− Develop appropriate performance measures, both for own performance and
the service providers’ performance, and systems to monitor them.
− Build the compliance requirements and performance measures into contracts.
• Service Provider
− Be sensitive to long run cost and value due to better logistics services.
Identify market segments that have value for quality and make appropriate
investments. Scale and scope of operations would be useful instrumentalities.
− Comply with standards and the law.
− Develop appropriate performance measures and systems to monitor them.

However, there are limits imposed by fundamental cultural and socio-economic

factors, as to what extent the unholy equilibrium can be changed.

• Soft attitude towards time: driven by philosophy and culture.

• Significant role of small player: driven by “forced entrepreneurship” due to
surplus labor, need to drive down costs, easy entry/exit, and the ability to bear
demand risks and transaction risks.

In the long run, it is possible that these would also change.

In conclusion, a methodology is required to be in place to measure logistics cost and

quality of logistics service on various dimensions. Apart from the imperative focus on
standards and practises, it is useful to have a prioritisation for infrastructure
improvement, possibly starting with the cluster concept provided in the theme paper
of this summit [Vishwanadham and Gaonkar, 2003].

4. References

Air Transport Association of America and National Fisheries Institute, 2002.

Guidelines for the Air Shipment of Fresh Fish and Seafood: Second Edition,
Washington DC.

Ananth, Raman, 1995. Apparel Export and Indian Economy, Harvard Business
School Case.

Avittathur, B and Shah, J, 2001. Distribution Centre Location Modelling for

Differential Sales Tax Structure, Working Paper No 429/2001, Indian Institute of
Management, Calcutta.

Business World, 2002. Operation Streamline, 18th Feb 2002.

CASS Information Systems, 2002. State of Logistics Report, 2002.

CII, 1997, 1999, and 2001. Logistics Summit Theme Papers and Wrap-Up
Presentations, Chennai.

CSO, 2002. National Accounts Statistics, 2002, New Delhi.

Government of India, 2003. Economic Survey 2002-03, Ministry of Finance and

Company Affairs, New Delhi.

Indian Ports Association, 2002. Major Ports of India: A Profile 2001-2002, New
Delhi.
Indian Railways, 2003. Annual Report & Accounts 2001-02, New Delhi.

Mohan, Rakesh, 1996. The India Infrastructure Report: Policy Imperatives for
Growth and Welfare, Expert Group on the Commercialisation of Infrastructure
Projects, National Council of Applied Economic Research, New Delhi.

Raghuram, G, 1992. Logistics Management: An Introductory Note, Vikalpa, Vol 17,

No 1, Ahmedabad, Jan-Mar 1992.

Raghuram, G, 2001. Sectoral Issues in Transportation, Ch 7.2 in India Infrastructure

Report 2001: Issues in Regulation and Market Structure, 3iNetwork, Oxford
University Press, New Delhi.

Sahay, B S, Iyer, Girish S, and Gupta, Sandeep, 2002. Logistics in India & China: A
Reality Check, Industry 2.0, July 2002.

Singh, N and Shah, J, 2001. Benchmarking the Supply Chain Performance:

Development of a Framework, The Journal of Supply Chain Management, Vol 37, No
1, 2001, pp 37-47.

Vishwanadham, N, and Gaonkar, Roshan, 2003. Leveraging Logistics to Enhance the

Competitiveness of all Indian Economic Sectors, Theme paper CII Logistics 2003,
Chennai.

http://www.hwtc.org/PDF%20Files/Korea%20Economic%20Briefs%20July%2014.pdf

http://www.sitl-china.com/en/business.jsp
 Exhibit 1

Logistics Costs for the Indian Economy

93-94 Prices
Year Inventory Inventory Railways Transport by Total Transport Administration Total
Carrying Cost* Other Means Cost Cost ** Logistics
(A) (B) (A) + (B) Cost

Rs Billion Rs Billion % Rs Billion Rs Billion Rs Billion % Rs Billion % Rs Billion

95-96 2573.64 669.15 55.70 106.57 379.35 485.92 40.45 46.20 3.85 1201.27
96-97 2451.58 637.41 52.85 111.69 410.54 522.23 43.30 46.39 3.85 1206.03
97-98 2556.87 664.79 52.72 113.67 434.05 547.72 43.44 48.50 3.85 1261.01
98-99 2543.17 661.22 51.58 115.77 455.74 571.51 44.58 49.31 3.85 1282.04
99-00 2775.99 721.76 51.97 126.20 487.55 613.75 44.19 53.42 3.85 1388.93
00-01 2921.73 759.65 51.86 131.63 517.13 648.76 44.29 56.34 3.85 1464.75

Year Total Logistics Cost GDP Logistics Cost/GDP

Rs Billion Rs Billion %
95-96 1201.27 8995.63 13.4
96-97 1206.03 9700.83 12.4
97-98 1261.01 10163.99 12.4
98-99 1282.04 10824.72 11.8
99-00 1388.93 11485.00 12.1
00-01 1464.75 11939.22 12.3

* Inventory carrying cost calculated at 26%. The [CASS Information Systems, 2002] report uses
22 % for the US economy and since India has higher financing cost by about 4%.

** Administration cost is taken as 4% of transportation and inventory cost for the year.

Source: [CSO, 2002]

 Exhibit 2

Logistics Costs for India

Nominal Values
Organized
1987 1994
Sector
Transportation 38% 45%
Inventory 28% 25%
Warehousing
20%
Packaging 30%
Losses 14%
Total Cost 10% 12%
Logistics Cost
250 800
(Rs billion)
GDP
2,500 6,700
(Rs billion)

Source: [Raghuram, G, 1992]

 Exhibit 3

Logistics Costs for the US Economy

Nominal Values
Year Values of Inventory Inventory Carrying Transportation Administration Total
All Business Carrying Cost Cost Cost Logistics
Inventory Rate Cost
$ Billion % $ Billion % $ Billion % $ Billion % $ Billion
1987 875 25.7 225 41.67 294 54.44 21 3.89 540
1988 944 26.6 251 42.76 313 53.32 23 3.92 587
1989 1005 28.1 282 44.41 329 51.81 24 3.78 635
1990 1041 27.2 283 42.94 351 53.26 25 3.79 659
1991 1030 24.9 256 40.31 355 55.91 24 3.78 635
1992 1043 22.7 237 37.26 375 58.96 24 3.77 636
1993 1076 22.2 239 36.21 396 60.00 25 3.79 660
1994 1127 23.5 265 37.22 420 58.99 27 3.79 712
1995 1211 24.9 302 39.07 441 57.05 30 3.88 773
1996 1240 24.4 303 37.83 467 58.30 31 3.87 801
1997 1280 24.5 314 36.94 503 59.18 33 3.88 850
1998 1317 24.4 321 36.31 529 59.84 34 3.85 884
1999 1381 24.1 333 36.12 554 60.09 35 3.80 922
2000 1478 25.3 374 37.29 590 58.82 39 3.89 1003
2001 1486 22.8 339 35.42 581 60.71 37 3.87 957
2002 1444 20.6 298 32.75 577 63.41 35 3.85 910

Year Total Logistics Cost GDP Logistics Cost/ GDP

$ Billion $ Billion %
1987 540 4740 11.4
1988 587 5110 11.5
1989 635 5440 11.7
1990 659 5800 11.4
1991 635 5990 10.6
1992 636 6320 10.1
1993 660 6640 9.9
1994 712 7050 10.1
1995 773 7400 10.4
1996 801 7810 10.3
1997 850 8320 10.2
1998 884 8780 10.1
1999 922 9270 10.0
2000 1003 9870 10.2
2001 957 10080 9.5
2002 910 10470 8.7

Source: [CASS Information Systems, 2002]

 Exhibit 4

Logistics Costs for India: 2001-02

™ IR freight earnings for 2001-02: Rs 250 billion [Indian Railways, 2003]

™ Net transport earnings (estimated IR’s share as 20%): Rs 1,250 billion
™ Total logistics cost (assuming transport share as 45%): Rs 2,800 billion
™ With GDP for 2002 estimated at Rs 22,000 billion, logistics cost share is
about 13%

Organized
Sector
Transportation 45%
Inventory
Warehousing
55%
Packaging
Losses
Total Cost 13%
Logistics Cost
2,800
(Rs billion)
GDP
22,000
(Rs billion)
 Exhibit 5

Ratio of Logistics Cost to GDP for Selected Countries

Country Japan USA Korea China India

Ratio of Logistics Cost to GDP 9.6 % 9.5 % 12.4 % 16.7% 12.3 %

Source: http://www.sitl-china.com/en/business.jsp
http://www.hwtc.org/PDF%20Files/Korea%20Economic%20Briefs%20July%2014.pdf

Figure 1

Analyzing Logistics Costs Across Countries

Low
India China

Quality of
Logistics High South
USA
Service Korea

Service Manufacturing
Intensive Intensive

Nature of Economy
 Figure 2

Unholy Equilibrium in the Road Transportation Sector

Government Policy:
• Large number of check points (inter- Front Line Regulatory
state, octroi, etc) Functionaries
• Motor Transport Workers Act (duty • Compromise on policy
hours, rest requirements, etc) implementation and incentives
• Financing incentives for small sized for status quo
truck owners
• Motor Vehicles Act (driver licensing,
over loading, emission norms etc)

Core Attributes
Industry Structure • Price based Induced Externalities
• Disaggregated competition
ownership structure • Poor logistics service • Safety
• Separation between quality • Pollution
ownership (truck • Low transportation • Damage to roads
owner) and marketing cost
(trucking company) • No commercial entry
barrier

Truck Owner: Trucking Company: Shipper:

• Overloading of vehicles • Hire on lowest rates • Focus on direct transportation
• Poor truck maintenance • No monitoring of supply cost only
• Side payments side service quality • Reduced expectation from
service [provider
 Figure 3

Roadmap for Logistics Excellence

B: Optimal position without C: Optimal changes with

structural changes structural change either in
infrastructure or practices front

A: Existing position
D: Optimal position with
structural changes in
infrastructure and practices
Logistics Cost front

0 Service Level 100

Appendix

Examples of Standards

Standards are available internationally, generally in the developed country context.

The European Union (EU) has developed standards, often with a specific focus on
imports. As an example, in the context of marine exports, Indian exporters have
adopted both the EU standards and Hazard Analysis Critical Control Point (HACCP)
guidelines.

What is required is standards evolved within India, with an ownership by the specific
industry verticals. We outline an example of the standards for air transportation of
seafood in the US, as specified by Air Transport Association of America and National
Fisheries Institute. One of the reasons we chose this example is because seafood
availability (and consequently consumption) in the Indian hinterland is significantly
lower than in the US. The primary reason is due to the poor logistics systems.

• Handling and Packing Considerations for all Seafood

− Selection of appropriate packing materials according to durability, water-

tightness and insulation.
− Pre-chilling the product before packing to preserve low temperatures.
− Pre-chilling live seafood to reduce body metabolism. Adequate air for live
products must be checked, and thus the bags containing seafood must not be
sealed.
− Usage of proper coolant, eg gel refrigerant, wet ice in sealed bags, or dry ice
(regulatory compliance for dry ice must be checked).
− Coolants must be placed to absorb heat entering package from top and
bottom.
− The time between packing and shipment must be minimized.

• Packaging Design

− Inside packaging
ƒ Sealed polyethylene bag of sufficient thickness to resist puncture and
retain liquids.
ƒ Double packing with single polyethylene liner placed to the outside of the
insulating material.
ƒ Adequate absorbent material or padding between sealed polyethylene
product back and inner wall of outer packaging.
ƒ Size of polyethylene bag (sufficiently large to overlap and fold closed).

− Outside packaging
ƒ Outer boxed made out of corrugated paper board or solid fiberboard.
ƒ Various plies of paperboard could be wax-saturated, impregnated, wax-
coated or treated by other water-resistant processes in certain cases.
ƒ Box and container design developed after considering the density of the
product to be transported.

− Banding/other types of external sealing materials should be designed not to

cut or damage the container or other packages
 − Shipments in unit load devices

• Transportation from Packing House to Airport

− The package design must provide conditions suitable for maintaining the
product temperature (about 320 F)
− The packaged fish must reach the airport quickly
− Transporting shipments in refrigerated and insulated vehicles is useful where
packages maybe be exposed to elevated temperatures and/or when long trips
to airport are expected.
− Packages must be loaded in transport vehicles to minimize movement and
susceptibility to dropping.
− Stacks of seafood packages should be planned to avoid tilted or overhanging
boxes.
− Methods and equipment used to load and unload shipments must protect
package integrity.

Source: [Air Transport Association of America and National Fisheries Institute, 2002]